The potential of three Azotobacter chroococcum strains for whey degradation and alginate production were investigated. After dilution, samples were spread plated on isolation agar and Manitol agar and incubated at 30 °C for 24 h. Microorganisms were screened for their ability to whey degradation and alginate production based on colony morphology, negative and capsule staining, ability to decrease the apparent turbidity of the fermentation broths in batch and semi continuous culture by spectrophotometer assay at 400 nanometer and tensiometer assay. Of the three strains tested for whey degradation, only Azotobacter chroococcum 1723 produced significant apparent growth on whey broth and could decrease about 70 % of turbidity in fermentation broth during 6 days in batch culture. Colonies of this strain was characteristically yellow, large, moucoid and slimy on whey agar than Manitol agar after 24 h at 30 °C. Transmission electron microscopy assay and Carbazole reagent were used to recognize the alginate biopolymer. After optimizing environmental factors such as pH, salt concentration and temperature, this strain was able to produce exopolysaccharide greater than 5 mg/mL. Optimum results were obtained when using whey broth as a fermentation medium without extra salt, temperature at 35 °C and pH 7. Increasing inorganic and organic nitrogen sources (yeast extract and NH4NO3) reduced whey degradation at least 30%. Transmission electron microscopy assay showed a net-structured polysaccharide capsule around the cells. Semi-continuous culture results demonstrated that, alginate production as well as whey degradation was decreased (1 mg/mL and 30 %).